LM is an Australian fund manager founded in 1998 that manages over AUD 3 billion in assets. It has 130 employees spread across 8 offices worldwide. LM specializes in Australian property and funds management. It offers the LM Australian Income Fund and LM Managed Performance Fund, which have consistently outperformed cash rates since inception. The funds invest in a variety of Australian debt securities and property assets to generate stable income returns.

1. LM - The global pathway to
Australian investment solutions

2. Things you may not know about LM
> Founded in 1998
> LM is an Australian Fund Manager
> Registered with the Australian Securities & Investment Commission
(ASIC) as a Responsible Entity & Australian Financial Services
Licensee
> LM manages Australian assets with a gross realisation value in excess
of AUD 3 billion
> LM is privately owned and first registered as a Responsible Entity in
1998
> All funds offered and managed by LM carry Australian assets only
> LM is an Australian fund specialist

3. Things you may not know about LM
> 130 people
> 8 offices
> Operates worldwide in more than 70 countries
> Invested in excess of AUD 3 billion into the Australian property
market since inception
> Head Office for LM is on the Gold Coast in Queensland, Australia
> LM clients worldwide are only licensed intermediaries, we do not
accept investment from the public directly in any country
> Our expertise is in Australian property and funds management

4. Things you may not know about LM
> Deutsche Bank manages our expertise in our structured products and
issues the Capital Guarantee for the same
> Ernst & Young are our Fund auditors and accountants
> PKF are our company accountants
> LM Income Funds generally outperform Bank Cash rates by 2.00%pa
to 5.00%pa

5. LM Offices
London
Dubai Hong Kong
Bangkok
Johannesburg Gold Coast
Sydney
Queenstown

6. Gold Coast Head Office

7. LM as a Responsible Entity
> Licensed under the Managed Investments Act (1998)
> Forms part of Corporations Law in Australia
> Regulated by ASIC (Australian Securities and Investment
Commission)
> Australia is recognised for one of the best financial systems in the
world for regulation
> Adheres to stringent requirements and conditions which are
audited annually
> LM must be a public company (LM not listed)
> Meets audit and compliance requirements

8. LM as a Responsible Entity
> A minimum Net Tangible Assets (NTA) of AUD 5 million, subject to
annual audit and reporting to ASIC is held by LM
> Responsible Officers with necessary education and specific
practical experience in each sector are present within the Company
> PDS’, Constitution and Compliance Plan all lodged with regulator
> Contractual agreement between the investor and fund manager
takes place upon the signing of an application

9. About Australia:
Can this dream run continue?

10. Australian Economy
> Remarkably resilient
> Strong economic growth for more than 21 years
> World record
> Well above world average
> Well above other developed economies
> Only developed economy not to go into recession
> Low sovereign debt levels
> One fifth of the level of Canada’s (often considered a safe haven).
Canada 36.3% > Australia 8.3% (See Global Comparison slide).
> Room to move if required
> Well equipped to weather offshore conditions

11. Real GDP Growth by Country: 2004-2012
F = Forecast; 1 Based on market exchange rates.
Sources: Austrade Benchmark Report 2011, International Monetary Fund, World Economic Outlook (WEO) Database, April 2011; WEO Update June 2011.

12. World’s 13th Largest Economy
13. Australia 2.1%
F = Forecast;
Sources: Austrade Benchmark Report 2011, International Monetary Fund, World Economic Outlook (WEO) Database, April 2011.

13. Australian Economy
More to it than just the mining sector
Source: Australian Bureau of Statistics.

14. Australian Economy: Financial Services
> One of the largest funds management industries worldwide
> Largest sector in the Australian economy (11%)
> Compulsory superannuation (9% annually from employer)
> Building wealth for retirement
> AUD sixth most traded currency
> AUD/USD fourth most traded currency pair
> Second largest REIT market after the US
> Strong banking sector. Australia has 4 of the 9 top-rated
banks in the world (AA-)

15. Can this Dream Run Continue?
> Australia boasts strong financial fundamentals
> Interest rates – room for monetary expansion
> Solid fiscal finances – room for fiscal expansion
> See following slide

16. Global Comparison:
General Government Net Debt 2012
Average 64.4
Advanced 73.3
Emerging 25.7
Sources: International Monetary Fund (IMF) World Economic and Financial Surveys, Fiscal Monitor, April 2011, Statistical Table 8;
Austrade Benchmark Report 2011.

17. Can this Dream Run Continue?
> Interest rates – room for monetary expansion
> Solid fiscal finances – room for fiscal expansion
> Links to Asia
> See following two slides

18. Australia
On the Doorstep of One of the Fastest Growing Regions
Note: ‘Developing Asia’ includes Afghanistan, Republic of Bangladesh, Bhutan, Brunei Darussalam, Cambodia, China, Fiji, India, Indonesia, Kiribati, Laos,
Malaysia, Maldives, Myanmar, Nepal, Pakistan, Papua New Guinea, Philippines, Samoa, Solomon Islands, Sri Lanka, Thailand, Timor-Leste, Tonga,
Vanuatu, and Vietnam. ‘Newly industrialised Asian economies’ include Hong Kong, Korea, Singapore & Taiwan.
Source: Calculations based on IMF World Economic Outlook (WEO), April 2010 and IMF WEO Update, July 2010.

19. Australia’s Merchandise Exports By Country
CAGR = Compound Annual Growth Rate. FOB = Free on Board. 1 Financial ending June.
Sources: Australian Bureau of Statistics, Cat No. 5368.0, International Trade in Goods and Services, Australia (Released 3 August 2011), Table 14a;
Austrade Benchmark Report 2011.

20. Can this Dream Run Continue?
> Interest rates – room for monetary expansion
> Solid fiscal finances – room for fiscal expansion
> Links to Asia
> Private sector capital investment of AUD 500 billion over the next 5 to
10 years
> Low unemployment
> Effective immigration policy
> Immigrants required to bring necessary skills to Australian workforce or
money.
> Certain skilled immigrants must inhabit specific geographical locations for a
period of time to continue steady growth of all regions

21. LM Australian Income Fund
Conservative Income

22. LM Australian Income Fund
Current Net Indicative Rates
7 Day
1 Year 2 Years 3 Years 4 Years 5 Years
Flexi
GBP 3.50%pa 4.00%pa 4.25%pa 4.50%pa 4.75%pa 5.00%pa
EUR 3.00%pa 4.00%pa 4.25%pa 4.50%pa 4.75%pa 5.00%pa
USD 2.00%pa 2.25%pa 2.50%pa 2.75%pa 3.00%pa 3.25%pa
AUD
5.50%pa 6.00%pa 6.25%pa 6.50%pa 6.75%pa 7.00%pa
Rates are net of all fund fees and expenses, and 10% non-resident withholding tax.

23. LM Australian Income Fund
Rates are net of all fund fees and expenses, and 10% non-resident withholding tax.

24. Rates that have Consistently Outperformed Cash
> Rates are current as at today based on the portfolio model of the
Fund
> Rates are intended to outperform cash in various currencies with
the longer terms attracting a greater premium
> The rates are not guaranteed or fixed for the term
> The Fund has a track record of delivering its target
outperformance of cash in each and every year since inception
> Global Portfolio Bonds
> Personal investment

25. LM Australian Income Fund
Debt Securities
Conservative lending only exposure: Loan Rate:
> Average LVR 65.00% > 10.00%pa – 12.00%pa
> Maximum LVR 75.00% property value
> Target allocation benchmark:
> 5.00% -10.00% cash
> 85.00% - 95.00% mortgages

26. LM Australian Income Fund
In the Investment Portfolio
> Income and capital stability
> Availability in multi-currency so it fits all client portfolios
> Think 1 year minimum investment horizon for income
> Available for direct investment or via the bonds
> Diversity and strength of Australian property based assets:
Competing with Australian Banks
> Economy
> Property

27. LM Managed Performance Fund :
Enhanced Income

28. LM Managed Performance Fund
Enhanced Income
Fund Facts
> Fund Inception 2001
> Foreign Currency Launched 2006
> Fund Size AUD307,956,802
Ten Year Track Record
> Delivery of Forecast Income
> Delivery of Stable Unit Price

29. LM Managed Performance Fund
In the Investment Portfolio
>
Competitive income
>
Availability in multi-currency so it fits all your clients
>
Think 3 year minimum investment horizon for income
>
Available for direct investment and via the bonds
>
Diversity and strength of Australian property based assets:
Competing with Australian Banks
> Economy
> Property

30. LM Managed Performance Fund
Investment Objective
> Utilises LM's specialist property expertise to actively participate in
ownership / equity like positions in Australian property based
assets, secured by a debt position
Behind the scenes it delivers, through:
> Utilisation of asset structure to realise all returns as
income/interest only (important for tax purposes)
> Target performance of 4.00%pa to 5.00%pa above cash deposit
rates

31. LM Managed Performance Fund
Assets
> Cash
> Loans
> Range of loan debt securities
> Equity funding with profit benefits

32. LM Managed Performance Fund
How it Generates Enhanced Performance
A. Range of Loan Debt Securities
> Usual range of commercial and development funding
Adviser Fee
Loan – could be a first mortgage or a second behind a senior
debt funder
Competing with Australian Banks

33. LM Managed Performance Fund
How it Generates Enhanced Performance
B. Ownership like Position Structured as an Income Return
> Profit Projection over 2 years: 20% - Profit passed to Fund each year
25% Start 1yr 2yr
> Loan Rate = Equity / Profit over time $100K $20K $44K
> Development over 2 years at 20%pa
compounding $100K $144K

34. LM Managed Performance Fund
Current Net Indicative Rates
2 Years 3 Years 4 Years 5 Years
GBP 6.00%pa 7.00%pa 7.50%pa 8.00%pa
EUR 6.00%pa 7.00%pa 7.50%pa 8.00%pa
USD 4.00%pa 5.00%pa 5.50%pa 6.00%pa
AUD
7.50%pa 8.50%pa 9.00%pa 9.50%pa
Rates are net of all fund fees and expenses, and 10% non-resident withholding tax.

35. LM Managed Performance Fund
Rates are net of all fund fees and expenses, and 10% non-resident withholding tax.

36. LM Managed Performance Fund
Fund Assets as at 30 September 2012
Sector Diversification
Commercial Loans 17.23%
Retail 0.87%
Industrial 0.08%
Pre-Development Land 10.80%
Residential 66.70%
Aged Care / Retirement 4.32%

37. For further information, contact your LM representative; or
LM Head Office E: mail@LMaustralia.com T: +61 7 5584 4500
www.LMaustralia.com